Communication for Sustainable Development

“More electricity can mean less energy”

Usually diplomatic, John Scowcroft, Eurelectric’s head of unit for environment and sustainable development policy, has had enough of the power sector being portrayed as the bad boy on efficiency and environment. Scowcroft wants policy makers to start working with industry.

Is the electricity industry the bad boy on energy efficiency?

Many policy makers repeat that electricity companies do not have incentives to promote energy efficiency. This is a catchy slogan. There’s only one problem. It is absolutely false even. Someone keeps trying to sell this as a fact. The reality is actually quite the opposite. Electricity companies are already offering energy efficiency services to their customers. They would love to do more, if policy makers would help by lifting barriers. Our recent survey among some 150 European companies just confirms this fact. Check my words by visiting the website of your own electricity provider.

Don’t you get more money if you sell more energy?

The main drivers for electricity companies are commercial. In competing markets, prices are good so as to attract customers, but not good enough to keep them. Companies need to build a mutually beneficial relationship with their customers. Energy efficiency plays a crucial role in this. I’d like EU policy makers to think twice before portraying electricity companies as the bad guys. This ignores empirical evidence. It would be more appropriate to engage with the sector to find solutions so as to deliver more services to customers.

Is it not nice that the Commission is finally toying with the idea of ‘white certificates’?

The impact assessment accompanying the energy efficiency plan is quite poor on this issue. It is still not clear what the Commission is planning to propose that is not already present in the current Energy Services Directive. Moreover, many other approaches beside obligations exist across Europe. I wouldn’t rule them out just yet. Energy efficiency services and products should be offered, not imposed. And, at the moment, the market is not really lacking in supply of energy services, but rather in demand. The idea of designing schemes that ignore end-user barriers and local realities sounds rather optimistic to me. It is based on the assumption that end-users will accept a priori anything imposed on them.

Are you happy that binding efficiency targets are buried, at least as far as the member states and the Commission are concerned?

The debate on binding or non-binding targets does not really excite us. It’s not the nature of the target that drives change. It is the policies that will be needed to reach the target. We are, in general, very critical as to the multiplication of targets. The more targets we have, the more – often unforeseen – side-effects there will be. We are more likely to end up having to implement conflicting policies.

Are policy makers doing enough to build sufficient investment incentives for the electricity industry?

The overall investment climate is, at the moment, quite negative. There are many regulatory uncertainties both at European and national level. We are certainly investing in improving the performance of power plants, but many new projects have been put on hold or are facing significant delays due to lengthy administrative procedures and local opposition to almost any new installation. This applies to pretty well every technology. Our sector should not be left alone to deal with all these issues. A strong and long-lasting political support is definitely needed. At this point in time, it is, unfortunately, missing.

Do you see sufficient recognition of a ‘systems approach’ to energy efficiency?

Not really. The Commission has called for enhancing energy efficiency throughout the value chain. But instead of looking at the way the system operates as a whole, it has split the chain into many pieces. The result? We have, on the one hand, EU law that, for very clear and justified environmental reasons, requires thermal power plants to effectively run less efficiently. On the other hand, the focus seems to be placed only on the efficiency potential at the installation level alone. This disregards the way the installation effectively operates within the whole system. This seems, at best, a paradox to me. For example, to cover for the variability of some renewables, we need thermal plants that can come onto the system very rapidly. Running up and down plants is not the most efficient way to use them. But from a system point of view this is necessary and overall it is probably the most efficient way of keeping the lights on.

More generally, our ‘Power choices’ study showed the need to decarbonise the electricity sector together with strong action on the demand side via electric vehicles, electric heating and cooling via heat pumps, etc. This would not only lead to decarbonisation of the economy, but also reduce the overall amount of energy used in the economy as a proportion of GDP. If properly used, more electricity can mean less energy. Isn’t that energy efficiency?

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